During the session on Wednesday, without a doubt the most important announcement in our opinion is going to be the UK GDP numbers. We believe this could give us a bit of a clue as to where the British economy is going, and with that, we think that the FTSE and the British pound both will come into focus.
As you can see on the chart below, the GBP/USD pair initially fell during the day on Tuesday, but found buyers below to turn things back around and form a bit of a hammer. This tells us that the market will continue to test the 1.54 level for resistance, and that it is been rather tenacious about that. With this, we are buyers of calls on short-term pullbacks, as the market should break out above that area and then go to test the 1.55 handle.
The FTSE, on the other hand, looks very soft. It appears that we are going to head to the 6700 level without too many issues, and perhaps as low as the 6600 level. With this, we believe that unless we get a daily close above the 6800 level, all you can do is buy puts on short-term rallies out the FTSE looks broken.
Silver markets initially tried to rally during the course of the day on Tuesday, but sold off in the end. By doing so, it shows just how much bearish pressure there is in this marketplace, and as a result we are buyers of puts below the $15.93 region. This is a short-term trade for a move down to $15.50 or so, but we do think that the selling pressure will continue in the spot market, which of course will offer nice put buying opportunities.